My Controversial take on the Global Credit Industry - Financial Mirage

As someone deeply entrenched in the fintech , I’m taking a path less traveled by voicing out my discontent on the credit culture that's rampant today. Credit, a term that should resonate with hope and opportunity, seems to have veered off into a realm of exclusivity. The essence of credit, to my understanding, has always been about aiding those in need, to propel them forward in their financial journey. The scene that unfolds before my eyes presents a contrary narrative.

Credit cards, instead of being a lifeline, have morphed into a lifestyle accessory. They are flaunted, not for the credit they offer, but for the status they entail. A glaring example of this is the surge of elite cards like the American Express Centurion or the Chase Sapphire Reserve, which are prevalent more for their exclusive benefits and status symbols rather than their credit offerings. The industry thrives on the late fee earnings from individuals who, amidst the hustle of life, miss paying their bills on time. IMO honestly, It’s a game where the house always wins. The ones desperately needing are often left standing in the cold, their faces pressed against the glass of financial inclusivity, gazing at the elusive world of credit that lies beyond their reach even after doing everything they can.

In the midst of a credit landscape populated by instant credit, Buy Now Pay Later (BNPL), and pre-salary schemes, a glaring issue still persists. These products, while marketed as financial aids, often target those not in dire need, creating an illusion of credit ease. It's like solving non-problems for individuals who already have stable finances. This conduct is more than a trivial misdirection; it's a significant deviation from credit's core purpose. Worldwide, about half the adults population, approximating 2.5 billion individuals, stay untouched by formal financial services, with a staggering 75% of the impoverished being unbanked due to prohibitive costs and other barriers. The core of credit should be about financial empowerment, not creating a faux sense of financial ease among the already well-off. The narrative needs a drastic shift, focusing on real issues rather than creating superficial financial products.

A shimmer of hope emerged with initiatives such as Brazil’s Desenrola , aiming to rehabilitate the credit deprived. Similarly, Nubank, a fintech giant in Latin America, has been making strides in extending credit to the unbanked and underbanked populations, truly embodying the spirit of financial inclusivity. But such endeavors are like a tiny drop in the ocean. The credit industry across the world needs more than just a facelift; it really requires a heart transplant and deep self reflection.The outcry for a new credit paradigm is not about painting the wealthy as villains. It’s about revisiting the essence of credit and realigning it with its core purpose - to serve as a stepping stone for those in need. This issue isn't confined to any geographical boundaries; it's a global phenomenon. From the bustling heart of New York to the serene countryside of India, the credit disparity is palpable.

The credit industry stands at a crossroads. It’s high time it took a long, hard look at its practices and embarked on a path of transformation. By doing good, by extending credit to the needy, the industry won’t just earn goodwill, but will discover sustainable ways to thrive. Products, trends and startups are not merely about chasing profits, but really about making a meaningful impact. I would really like to live in a world where credit serves the needy, where businesses, irrespective of their balance sheets, have the credit required to foster growth, and where individuals don't shy away from credit, but embrace it to fuel their ambitions. A world where credit doesn’t discriminate but assimilates, fostering a culture of financial inclusivity and equality.

As we stand at the cusp of an AI revolution, the potential to re-engineer the credit landscape is immense. AI, with its predictive analytics and deep learning capabilities, can unravel the complex tapestry of 'credit worthiness', making it more inclusive. A recalibration of credit scoring algorithms to encompass a broader spectrum of financial behaviors and circumstances could be the first step towards democratizing credit access.Imagine a credit model that is antithetical to the existing paradigm. A model that solely caters to the financially marginalized, saying a firm 'no' to those with stellar credit scores. Such a model, driven by AI, could dissect financial behaviors and circumstances with a fine-tooth comb, ensuring that credit reaches the hands that desperately need it.

As dreams of a Universal Basic Income (UBI) echo through the corridors of the AI future, addressing the foundational flaw in the credit system is imperative. It's about time the credit industry took a step back to reflect, re-evaluate and re-engineer its principles to serve every stratum of society. As someone born and brought up in a middle-class family, and have studied on education loan, the narrative of credit being a privilege doesn’t sit well. The emotion is personal, the issue is real and the time to act is really now. The question to ponder is - when will credit shed its elitist robe, garb inclusivity, empowering every dream, fueling every ambition, and bridging the financial chasm that engulfs the globe today?

In the end, it's about not just creating better credit systems but nurturing a sense of trust, fairness, and hope. And as we march towards a future filled with promises of AI, let’s ensure these promises reach every corner, every individual, irrespective of their financial standing today. It’s a call for a credit revolution, one that restores its original purpose and in doing so, betters the lives of millions.